Editor’s note: Joseph Farah’s G2 Bulletin is an online, subscription intelligence news service from the creator of WorldNetDaily.com – a journalist who has been developing sources around the world for the last 25 years.

With Islamic “charities” under increasing international pressure and scrutiny to cut ties with terrorists, al-Qaida and other allied organizations are expanding operations in Latin America, establishing both legitimate and criminal enterprises to fund future operations, reports Joseph Farah’s G2 Bulletin.

A global focus on Saudi Arabian financial institutions behind the charity system, known as zakat, has seriously damaged the ability of Islamic terror groups to conduct business as usual, reports the premium online intelligence newsletter.

Intelligence sources agree that the terrorist financial scene is changing rapidly. Funding, at times, is achieved through cash payments, using various currencies, for certain terror services. Cash is obtained through a variety of illegal activities, predominantly through drug trade, human smuggling, extortion and money laundering.

According to U.S. Ambassador to Venezuela Charles Shapiro, almost every extremist terror group is now represented in Latin America. That list includes Osama bin Laden’s al-Qaida, Jemaah Islamiyah, Hamas and Islamic Jihad.

Here’s the way the system works, according to G2 Bulletin sources: Both newcomers to the Islamist movement and veterans of past operations are given loans to establish small businesses. These modest ventures involve food and clothing stores, transportation companies and other legitimate businesses stretching from minor real-estate investments to funding of small airlines. In return these businesses repay the loans with cash accrued from their trading revenues. The money is collected by roving collectors who change from time to time to avoid being traced.

According to Islam, adding interest on loans is regarded as usury and is strictly forbidden. Instead the business owner is asked to add a donation based on the initial principal. This can range from a few to thousands of dollars in each case. Some businesses, identified as having been established by terror groups in the infamous Muslim triangle around the border region between Argentina, Paraguay and Brazil, often are plain newspaper stands, corner stores or family-run tailor shops.

A unique financing channel, now evident primarily in the Gulf states and in Iraq, is the trade in precious metals and gems. This trading method is well entrenched in the cultures of the Near East and Asia. Lately it became obvious even Chechen mujahedeen are involved with such transfers. According to Russian sources, they smuggle gold from Asia to the Gulf states, where the price at times is higher than that of the official gold market. The method of bringing in the gold is uniquely simple.

“They don’t carry gold bullions but rather jewelry or coins,” said one Russian analyst. According to him and other sources, travelers and tourists are fitted with necklaces, earrings and other jewelry pieces, which they shed in the target country.

A German intelligence analyst in touch with G2B said European agencies are alarmed by the growing gold trade among immigrant circles, most of all Muslims and Russians. He was reminded of a World War I fund-raising slogan engraved on rings, which said: “I exchanged gold for iron.” The updated paraphrase is: “I exchanged gold for bombs.”

Drug trade, as much as it is profitable, is still mainly controlled by drug barons and gangs who will resist any takeover attempts by jihadists. However, attempts to smuggle drugs to the Gulf continue and the coalition has successfully intercepted a number of drug carrying dhows. The loss of large drug shipments, either confiscated or deliberately sunk to avoid detection, is regarded by the terrorists as a logistical failure.

These days the name of the game is the easy transfer of gold and diamonds originating in Africa, Latin America, Russia and many other places. A customs official has assessed that almost every woman crossing a customs terminal, anywhere in the world, is carrying gold. He said: “Monitoring this flow of funding can be implemented only through amendments to laws and regulations, including forcing customs declarations for personal precious jewelry. Even then only a minor portion will be reported.”

The terrorists are moving back to the historic, traditional and ethnic custom of conducting businesses by running a taxicab company in Paraguay, or trading gold in Qatar, and for that matter in any Arab center around the world.

The increase in activity by the terrorists in Latin America is coupled with an earlier G2 Bulletin report that the Islamists were creating relationships with gangs involved in human trafficking across the U.S.-Mexico border – a nightmare security issue for Americans.

Counter-terror experts monitoring the Central American scene are concerned with news that so-called youth gangs active in Central America are now moving north into Mexico.

The youth gangs, known to be among the most ruthless street criminals in that part of the world, prey on prospective illegal immigrants. Some indications from Honduras and Guatemala suggest that gangs known as Mara-18 and Salvatrucha are already active in the Mexican state of Chiapas, stretching their activity to Tijuana close to the U.S. border.

A number of Mara-18 members are known to have ties with drug dealers including those identified with the “Minaret Network,” affiliated with some of the most radical Islamic jihadists.

Some of the other gangs, primarily from El Salvador, are trying to mingle with illegal immigrants on their way to the large Phoenix-Arizona center of Mexican illegal immigration to the U.S. Police intelligence officials from Central America are warning the gang leaders have no scruples and they will be involved with all facets of violent crimes including terrorism, if “the price is right and the business is good.”

Hunted down by governments in Honduras and Guatemala, the gangs have turned up in recent months in eight Mexican states from Chiapas in the south to Tijuana on the U.S. border, leaving a trail of killings and rape.

The gangs, known as “maras,” prey on illegal migrants who travel from Central America up through Mexico by hopping cargo trains in the hope of reaching the United States. A string of arrests suggests the El Salvador-based Salvatrucha is recruiting in Mexico and becoming entrenched along the southern border.